The Pelletier Fire was Sioux City's worst fire in terms of property damage. Sometimes called "the great fire", the inferno gutted more than two entire blocks of downtown Sioux City.

The fire started in the Pelletier Department Store, located where the Badgerow Building now stands. It was the evening of December 23, 1904. Pretty paper Christmas decorations hung everywhere and the store was filled with shoppers. In the crowded basement, a salesman prepared to demonstrate some mechanical toys powered by a small steam engine. The salesman struck a match to light the engine. Horrified onlookers watched as the head of the match flew off and landed in a "snowdrift" of white cotton. In an instant, the cotton caught fire and the flames ignited hanging paper streamers. Fire Chief George Kelly happened to be in the area at the time. He noticed the wisp of smoke curling up from the basement. Immediately, he called in the alarm. The firemen were there in minutes, but the building was already ablaze. Soon the six-story Massachusetts Building was engulfed in flames.

Quickly, the flames jumped across the street to the Toy Building. Then the fire swept westward, devouring the Prugh Block at 314 Nebraska Street and the Leader Hotel to the south. The fire spread quickly until more than two blocks were ablaze.

The entire fire department fought the inferno, but their equipment was inadequate and they were powerless to stop the flames. As burning buildings collapsed, water lines broke and water pressure dropped.

Anxious merchants ran through the streets, carrying files, ledgers and cash registers. Men with trucks and moving vans tried to salvage merchandise ahead of the blaze, but the fire traveled too quickly and the efforts were mostly in vain.

The fire burned all night and smoldered into the dawn. The next morning, Christmas Eve, downtown Sioux City was a ghostly scene. Two and a half blocks of the downtown were destroyed.

Amazingly, only one man died in the disaster. The man jumped from his fourth floor apartment towards a life net waiting below. On the way down, he struck a telephone cable and his body was deflected to the pavement. He was killed by the fall.

Sioux City, like the phoenix, arose from the ashes. Only one year later, the scars from the fire were gone and new buildings rose from the ruins.